Nigeria’s efforts to increase its daily oil production face a significant setback following the grounding of Arik Air’s fleet by the Nigerian Airspace Management Agency (NAMA). The disruption could affect up to 200,000 barrels of crude oil per day, especially impacting Chevron’s operations.
Arik Air has been under a contractual agreement with Chevron and the Nigerian National Petroleum Company (NNPC) Limited to transport oil workers to the Osubi airstrip in Delta State. The Osubi field produces an average of 130,000 barrels per day. However, this production is now at risk after the airline was grounded due to a $2.5 million debt dispute involving Arik’s creditor, billionaire businessman Arthur Eze, and Arik’s founder, Johnson Arumemi-Ikhide.
On Tuesday, NAMA grounded Arik’s Q-400 aircraft, which had been used to ferry Chevron’s staff to the Osubi oil field. Consequently, Chevron’s team is currently unable to reach the site, threatening the continuity of oil extraction activities. Insiders indicate that the immediate impact could be a reduction in daily production by 130,000 barrels, with potential losses escalating to 200,000 barrels per day if the situation persists.
Chevron Nigeria Limited, a major player in the Nigerian oil sector, operates several key projects, including the Agbami field and natural gas facilities in the Niger Delta and Escravos regions. The grounding of Arik Air, therefore, not only affects Osubi but also other strategic locations like Escravos, further compounding the potential daily loss of crude oil production.
As of June, Nigeria’s daily oil production stood at 1.25 million barrels. The federal government has been striving to boost this output, particularly with local refineries nearing completion. However, the current suspension of Arik Air’s operations poses a significant obstacle to these efforts. The situation underscores the intricate dependencies within the oil production chain and the far-reaching impacts of logistical disruptions.
The resolution of this situation is critical to avoid substantial losses in daily crude oil production.
